Tom Fortin Talks Shop on Real Estate Development
Tom Fortin has over 20 years of experience in the field of Real Estate Development in Central Ohio, with involvement in several high-profile projects including The Battleship Building, Carlyles Watch, The Cube, and G Living. We recently caught up with Tom to discuss his passion for urban redevelopment, and find out more about what he’s currently working on along Gay Street.
Walker Evans: First, let’s talk a bit about “The Cube” project on the corner of Gay and High Streets. We’ve already seen Sugardaddy’s and The Sprint Store open recently. What’s the status on the rest of the project?
Tom Fortin: At Gay and High, both of our retail tenants are open now. Sprint is a customer sales and service center. I think they will do very well there, they sell all sprint cell phones and wireless products. Sugardaddy’s owners live at Neighborhood Launch. I was fortunate to meet them at their Polaris store. They opened here May 1st. They test marketed the Downtown area using the Pearl Market. They are doing very well so far, and have a really high customer count. I’m glad we are able to keep them Downtown.
To give you a little bit more about the building… the address is 1 East Gay. It was built in the 1920s as Dollar Savings and Loan. It had been vacant for the last nine years, which is surprising. I’ve called it the “Gateway to Gay Street”. It has a white Ohio limestone/marbleized exterior. I thought it resembled an ice cube, hence “The Cube” name. I try to market these buildings by giving them a unique name. Not only is the building shaped like an ice cube, I also think there is a market in our Downtown area for office cubicles. Small businesses looking for a prominent address, low rent, small space, and maybe sharing some amenities like a kitchen, conference room, fax machine, et cetera. That’s what I am planning for the second, third and fourth floors of the building.
Also, since the market is ice cold right now, the name Cube has a third meaning. [Laughs] I’m just going to piece my way through the second, third and fourth floors to see what the market bears. But the inquiries I am getting are from more incubator, independent type businesses.
WE: You also own 51 E. Gay a little further down the street. What’s in store for that building?
TF: 51-53 E. Gay is kind of like the ugly duckling on the block. It was formerly occupied by Capital Photo and I bought the building from the proprietor who I think operated Capital Photo for around 24 years. It’s a three story building. Probably around the 1920s it started out as City National Bank Trust, then I think it was a hardware store for a long time before it became Capital Photo. We have plans with Carlos and Carolina from El Arepazo, which is currently in Pearl Alley. Their business is so popular and they are really charismatic people. They just need more seating capacity. They are going to hold on to their existing space in Pearl Alley and keep that and come up with a different concept and expand into 51 E. Gay.
WE: I’ve been hearing rumors about this for awhile now… but you’re saying that they’re not planning on relocating El Arepazo, correct?
TF: Right. They are going to keep their spot in Pearl Alley. They are going to expand a new concept from 40 seats to about 130 seats at 51 E. Gay. We are trying to get them open by November or December of 2010.
On the second and third floor of that building I have two 1900 square foot residential lofts. They are going to be live-work lofts. I have a young couple moving in the second floor. They will live there and have an office overlooking Gay St. On the third floor, I’ve rented it to a single gentlemen in the computer/graphic/software business and he will also live there with a little office overlooking Gay Street.
WE: It sounds like people are really embracing Gay Street right now.
TF: I just love Gay Street. Frank Packard was our most notable city architect, a lot of people might be familiar with some of his buildings, namely The Seneca Hotel, The former Neil House, The Atlas Building and 8 E. Broad where his offices were. He designed our capital building. Gay Street was always his portfolio, in my opinion. There was a lot of influence, he designed some of the buildings and there and there is a lot of Packard influence there. Gay Street has kind of survived the test of time and is one of the few blocks with all of the buildings intact. There are no intermittent parking lots that tend to look like missing pieces of time. It is a very pretty block. I think all of the facades are pretty much the original facades and I think architecturally it is very receptive and I think our city has embraced the street as being our boardwalk, or Downtown’s Food Court. You have a lot of public and private investment there which I think will extend its lifespan; it is very pretty.
WE: Do you envision that development growing outward to other nearby streets? There’s a bit of retail on Long, and plenty of retail potential along High Street Downtown.
TF: Definitely. I’ve always looked at our city as being the ‘tale of two cities.’ There is a little bit more momentum north of Broad and starting at Broad and High and moving North. If you look for an epicenter in improvement and growth and demand it kind of starts there and moves north more rapidly than moving south. I love that Gay Street is the centerpiece of that, both commercially and residentially. The Marriott family invested $60M on their two hotels, The Renaissance and The Residence Inn. The Renaissance is one of our city’s best kept secrets in my opinion.
WE: They do have a really nice rooftop pool.
TF: They have that, and they have 402 rooms there. The Renaissance Hotel definitely has an Ian Schrager influence. He’s the father of boutique hotels in New York City and one of the co-founders of Studio 54. It’s just a gorgeous place to stay. When people stay there, they get bored and venture out to Gay Street. That’s why some of our finest eateries are surviving I think. Mitchell’s, Due Amici, TipTop, Latitude 41… it’s just a great little block for residents of Columbus and visitors of Columbus. Also, the Edwards development, Neighborhood Launch, continues to expand. It is just gorgeous and I think it is just going to get better. Moving north I think it is kind of hit or miss. I jokingly call Long Street “The Parking District”. There are a lot of parking lots. If you look at a global earth view it looks like a jigsaw puzzle with a lot of missing pieces.
WE: Yes, nearly everything from Fourth Street to Columbus State is parking.
TF: Yes, you see a lot of parking. I think over time, if there are enough incentives and enough demand I think those parking lots will evolve into residential-over-retail buildings. Most of our existing first floor retail businesses on Gay Street and High Street seem to be doing okay. There is kind of hit-or-miss demand on floors above the first floor.
WE: I recently spoke with Kacey Campbell, who is doing the new retail recruitment position for Capital Crossroads, and it sounds like what she’s found in her research is that a lot of the vacant storefronts are due to a mismatch between supply and demand. Many building owners are still holding out for years waiting for a new 10,000 square foot tenant for an empty 10,000 square foot space, when instead they could be filling the space immediately with 10 smaller 1,000 square foot tenants who are desperate for starter spaces. Would you agree with that assessment?
TF: I agree with that 100%. Even in The Cube at Gay and High, one of the retail spaces is 1,350 square feet, and the other is 1,275 square feet. I’ve always said that you’ve got to divide and conquer. I would have loved to find a tenant that takes all 3,200 square feet… but they are not knocking my door down. In this business you have to be a chameleon… reflect your environment and then deliver based on what people are asking for. There are opportunities in this economy. People are downsizing and people are budget conscious. I think what Kacey is saying is you’ve got to put your finger on the pulse of the market and split up those big storefronts.
WE: It sounds like even large national big-box companies like Target and WalMart are experimenting with smaller urban models and smaller footprints. We haven’t seen that in Columbus yet, but it is happening in a lot of other cities. Do you think there is potential here for that kind of new model?
TF: I think so. I think we need something like a miniature version of Whole Foods Downtown. Our full-time Downtown resident population isn’t big enough to support a full-scale grocery store.
WE: What about a grocery concept that can also act as a destination for residents of other neighborhoods in the region? Many North Market shoppers don’t necessarily live around it.
TF: Yeah, I think something like that is coming. As a real estate developer, you get a building and have a sense of what is needed Downtown. You can’t just put a sign in the window and hope that the miniature version of Whole Foods calls you. You have to go after it. I’ve been talking to mini urban markets in other cities and trying to get them to come to Columbus. There are a lot of models I’ve seen that I think would be attractive here.
WE: Do you think it’s feasible for a company from another city or region to open just one location in Columbus though, or would they need to open several and set up a distribution hub for that type of model to make sense in our market?
TF: I think that whatever a grocer does, they will have to complement their business with lunchtime cafe sales. I’ve talked to many of the grocers I love in the North Market and we just can’t sell enough grocery products to justify existence Downtown. So they have to complement it with prepared foods like Katzinger’s Deli does. That’s kind of a concept I’m working on to try to attract Downtown. That kind of concept will help the whole neighborhood, similar to what the North Market has done for the northern end of Downtown. I developed the Battleship Building next door to the North Market in 1994 and when the city announced that they were going to spend $3.5M on fixing up the North Market I knew that whole area was going to improve. And you’ve see what has happened since then. People want to live around there, they want to work around there. This was before there was any mention of a hockey team or an Arena District. That’s what will happen here on Gay Street too. People will want to live around a cool little grocer or market place.
WE: Outside of Downtown, you’ve also go the G Living project on Kenny and Henderson. Are there any updates on that?
TF: G Living is kind of mothballed for the time being. It happens to be a great location at Kenny and Henderson. It’s a 60,000 square foot building. The challenges of that building is that it was built on multiple levels. If it was all one level I think I could have leased it or sold it. But it is on multiple levels and that has stymied the demand for it. We haven’t had enough interested tenancy to justify the additional investment to move it forward. So right now it is on hold and nothing is really happening there. I had the concept of attracting several “green” firms to work under the same roof, but I couldn’t find enough tenants. I’m a niche player. When you have a vacant building, it’s vacant for a reason and you’ve got to come up with a good change of use to attract new tenants. It’s a tough economy right now, but I still think that’s a viable concept.
WE: With a lot of your focus being Downtown, what do you think the biggest challenges are that still need to be overcome on a larger scale for private investment to make more sense and speed up the process of urban redevelopment?
TF: I think what Downtown struggles with a little bit is connectivity and affordability. I think a lot more people will live downtown when it is more affordable. And I think our retailers and lawyers and residents would enjoy our Downtown more if our excitement zones were more connected. We don’t have an active cab service or subway line. We’re strictly relying on parking and cars and I think we suffer a little bit because of that. When you go to larger, more mature urban environment, you might park the car one time and go to a movie, grocery store, and several other different excitement zones. In Columbus, our amenities are a little more dispersed. For example, if you want to go to Due Amici and then the Art Museum, you would probably get back into your car to drive between the two. And that takes away from the pleasure of the urban experience.
WE: Do you think some of this is just perception though? To me, walking for a mile feels shorter when you’re walking through a denser neighborhood rather than walking a mile through a sea of parking lots. It makes everything feels further apart than it actually is.
TF: Yes, there is that. But obviously, when you are Downtown in say, New York City… you just stand curbside and raise your right hand and boom… you are in a cab. In Columbus you know you will have to walk. Or call and wait for a cab. Those are some of the things we need to work on.
WE: What are your thoughts on the new 2010 Downtown Development Plan?
TF: I love the idea of the Green Mile and really improving our riverfront. I like the ideas of mass transit, certainly. I like the ideas of what might happen at our former City Center. I don’t like parking garages, so I think something we could look into more to solve parking issues is what we have at the Statehouse with a beautiful green surface, but parking underneath. I think we need to do more of that. For example, Goodale Park. You think what a beautiful neighborhood that is, yet you hear people complaining there is no place to park. Our city already owns Goodale Park. We should perhaps consider putting parking underneath Goodale Park. The same goes for the Topiary Park. I just think there is a better use of our existing parkland, and we do need more greenery too. Not that we need to knock buildings down and make parks. I also agree that Broad Street is way too wide… it is almost like an airport runway. There is way too much asphalt there. We need more greenery and street medians.
WE: Narrowing Broad Street was part of the 2010 Plan that got a lot of positive response… the plan is to put it on a “road diet” and add the dual green medians to restore it back to what it used to be.
TF: That definitely would be a lot prettier. We also need to embrace public art. It really makes it fun to work downtown, live downtown. Those are the kinds of things that I support. Being a landlord, you are always trying to increase your occupancy in your buildings. To do that Downtown, you have to accentuate the lifestyle. You have to improve your resident’s quality of life, whether they are a resident, an office dweller or a retailer. I think that the more amenities that they all can experience in their Downtown within walking distance, the better and better our downtown urban experience will become.
More info about Thomas Fortin & Company, Inc. can be found at tomfortin.com.